Tencent-backed Miniso Sets Terms for $562 Million IPO

The Muji-inspired retailer is expected to debut on Wall Street next week.
十月. 08, 2020 03:41
Tencent-backed Miniso Sets Terms for $562 Million IPO

China's Miniso Group Holding Ltd. has fast-tracked its initial public offering worth up to $562.4 million expected next week.

The Muji-inspired (OTC: RYKKY) retailer expects to price its American depositary shares at $16.50 to $18.50 apiece, according to a Wednesday filing with the U.S. SEC.

Miniso aims to float 30.4 million shares on the New York Stock Exchange. Underwriters may acquire an additional 4.6 million ADSs upon the IPO. Each ADS represents four Class A ordinary shares.

Based in Guangzhou, Miniso sells stationary, cosmetics, textile, and beauty products, as well as toys, home décor, electronics, snacks, and accessories. It styles its products after the world-popular Japanese Muji brand, created by Tokyo-listed Ryohin Keikaku Co. Ltd., which centers on minimalism, eco-friendliness, natural textiles, quality, and the absence of a brand.

Founded in 2013, about 30 years after Muji, Miniso has established a network of 4,200 stores, of which it directly operates 129. Over 2,500 stores are located in China, while 1,680 Miniso stores are spread across over 80 countries and regions. It sells approximately 8,000 SKUs, the majority of which are under its own brand.

In its prospectus, Miniso states it aims to launch new SKUs weekly. "We believe our efficiency and speed-to-market at large scale are difficult for competitors to replicate," it said.

For the 12 months through June 2020, Miniso posted revenue of $1.3 billion, a 4% decline year-over-year. Losses narrowed 12% to $36.8 million, according to the filing.

Citing commissioned research by Frost & Sullivan, Miniso said the size of China's lifestyle products market by GMV reached $523.7 billion in 2019. It is the fastest-growing market segment across all retail segments, the report said.

Miniso said it intends to use the proceeds of its IPO to expand its store network, as well as invest in warehousing, logistics, and technology.

The company first publicly filed for a U.S. IPO in late September and has already received an expected listing timetable, which can in part be attributed to its backing by Chinese conglomerate Tencent Holdings Ltd. (HKEX: 0700) and large equity firm Hillhouse Capital. Under the proposed terms, the IPO would place it among the largest Chinese fundraisings in New York this year.

Entities of Tencent and Hillhouse each held stakes of 5.4% in Miniso prior to the IPO.

Miniso has applied to trade under the ticker symbol "MNSO." It is expected to debut on the week of Sep. 12, though the exact day has not been set.

Securing the deal are Goldman Sachs (Asia) LLC and BofA Securities Inc.